The truth is, this kind of market activity can have mixed results for buyers. It can leave them with limited choices in a market that is moving quickly, or it can offer up some excellent products from sellers who want to capitalize on the market by listing properties that otherwise would not become available for sale. Regardless, we are all at the mercy of supply and demand, and when the demand outweighs the supply, you can find rising prices and of course the dreaded multiple offer situation, AKA: bidding wars. This is where your Realtor® can help you get an edge by employing some tried and true tactics that can help you land your dream home.
Step 1: Get the thumbs up … way up!
Getting pre-approved for your financing in advance of the offer date is top priority. Make sure you have met all of your lenders conditions for pre-approval, like employment letters, check stubs, clearing credit card debt and find out how rigid the guidelines are. If, for example, your mortgage approval is $350,000, what do you need to do to go to $360,000? Is it possible? Are you confident enough to offer to buy a home without a finance condition? That is something you have to find out from your mortgage broker. By eliminating the need for the financing condition you present a stronger offer. The seller can feel confident that you are not going to back out the next day due to insufficient funding or buyer’s remorse.
Step 2: Flex you muscles … with a strong negotiating position
As a home buyer in this situation, you will need to submit the very best offer that you can, taking into consideration every term and condition of the offer, not only price. The home seller may have a number of offers to choose from and will take the most attractive one. In order to make your offer as attractive as possible, start by giving the seller exactly what they asked for in the way of closing date, deposit amount, what is included or excluded from the sale, as much as possible. What may seem inconsequential to you may be paramount to the seller.
Step 3: Show your unconditional love … for the house that is!
If you’re putting an offer on a hot property, you may need to consider not including some standard conditions (financing, home inspections). Although this is not a recommended approach, it is a reality. All things being equal, a firm offer in a bidding war will typically win over a conditional offer, regardless of the price.
Step 4: Show them the Money …
Every market is different, but in terms of what a strong offer may look like, each market will typically have a trend that your Realtor® can help you analyze and determine what your offer should be to give you the competitive edge. Including a hefty deposit is another great way to increase your offers appeal, and can ultimately give you that needed advantage in a multiple offer situation.
It is important to remember that in any multiple offer situation, only one offer will result in a sale, and the other buyers will no doubt be disappointed. While little can be done to ease that disappointment, working with an experienced Realtor® to ensure you receive fair and honest treatment throughout the offer and negotiation process can enhance the chances that buyers – successful or not – will not be discouraged to get back out there and keep looking!